Just witnessed an ad on TV for $2 for 2 litres of milk at Coles. (just did research and found out Woolies and Aldi are matching this). At first I thought great, as this is 50 cents off and they're saying its not just a special but their everyday price. Then I thought about the poor bastards trying to run milk bars - surely their days are numbered. And what about the dairy farmers. Now Coles may say that their are millionaire dairy farmers, but I don't know any. All I know is that they get up very early and need to be there every day of the year, including freezing cold winters. Then there are truck drivers and processors. So in the last few months milk has now come down about 33% in price. I pity the processors , because house brand milk is probably a break even proposition, with any profit made out of the branded stuff, that will now look considerably more exy.
Maybe Coles break even or possibly even lose money on this offer, but i highly doubt that. Since Wesfarmers took over the business, they have certainly shaken up the competition with smart marketing and some commonsense changes.
Some of the marketing I have noticed are:
- the $10 meals with Curtis Stone and then all the tie ins with Masterchef (Wesfarmers had already perfected TV sponsorship with Bunnings being all over Better Homes & Gardens like a rash)
- the hormone free beef (which has really pissed off much of the beef industry)
- now the $2 milk
Some of the stuff I have noticed at my local store are:
more open entrances, no coins required for trolleys, a slick little health food section, new bakers, fish shops and butchers that are no longer hidden away, but look like market stalls
I have even noticed they have painted white over some of the black out of the Coles headqurters in Hawthorn so it no longer looking like death Star.
While all this good news is happening, Woolworths is informing the market of downgrades and I guess they are really starting to get pissed off that their own turf is being threatened. "I know said the little boy - he threw a rock at me, so I shall throw a rock at him" And with that Woolies set about building a hardware chain to rival the massively successful Bunnings.
Anyone who has ever supplied Bunnings knows what a hard deal they can drive. If you want to play with the big boys, there are settlement discounts, advertising rebates and trading terms that include how many days notice you must give for a price rise (ie many). If you're a dominant supplier in you segment of the market, they will find another guy who is on the way up, give him a big order of half the stuff you supply, and then a year later come back to you threatening that you will lose the business because they have just been offered an unbelieable deal.....and unless you can match it......its kapoot.
Dulux got too strong, so Bunnings introduced Nippon paints so as to "keep the bastards honest".
Ok, so now their is a new player with the Woolworths/Lowes project Oxygen consortium they may call Masters (so from here on in i'll call it Masters, and then come back and edit this post if a new name comes along). Masters are starting to talk to many of Bunnings suppliers, and Bunnings apparently begun threatening some of these suppliers (no, thats illegal, so lets just say bullying). For many suppliers, they secretly hope Masters is a raging success. They are sick of bing dictated to by someone who has such a huge market share in so many categories. Get kicked out of Bunnings now and you face a life of dribbling out the dregs to Mitre 10s and Home Hardwares. But with 150 Masters stores, you start to get a bit of leverage back.
Ok, so I need to be careful that someone from Bunnings isn't one of the 7 weekly readers of this not yet famous jack.com.au blog (that was a shameless plug for the jack.com.au blog)(that was another one) or I might get sued for defamation. This week however Woolworths submitted a complaint against Bunnings to the ACCC, whingeing about some issues with suppliers. Rather makes them look like Dobbers, but Bunnings do seem like they may be getting a tad rattled.
So while these two giants battle with each other and take more of every doller out of Australia I want you other 6 readers to think about where you spend your money. There is nothing more satisfying for me than to once a month drive up to the StKilda Farmers Market, park for free in the Safeway (or is it Woolworths ?) carpark and proceed to spend my $100 on little guys and girls who drive for four hours and sell me some of the best damn free range chicken I have ever eaten, along with apple juice, almonds and all things in season. So what if they don't pay tax. I bet Wes and Woolie have teams of tax minimisation experts.
Its not just Farmers markets though, lets make a list of em: Total Tools, Mobil , Richies, plumbing and electrical stores, Best For Less. Actually I should mention any campanies as who knows who is a good citizen to support. I'll just have to shop overseas online stores! - powdered milk.
Do everything you can to support the independents. Never buy a paper or magazine at a supermarket because it is always going to be the same price as the newsagents, and if the guy in the independent bottle shop is $3 more for the same slab of beer, can't you occasionally give him the business, so one day he is not gone. Look at what the supermarkets in England did with DVDs - they killed off all the competition and then put the prices back up.
No newspaper, radio or TV station is ever going to tell you any of this, cause the 2 big wubyas spend so much money with them. If anything, they will help spread the propaganda. So you will never hear a rant like this in mainstream media. Look, at the end of the day, I do spend a bit with the majors, and they do offer employment and shareholder returns, but can't we just spread the love around a bit more - whatever happened to competition, oh yeah, they bought it out, killed it off or leave it there cause its just a small store and it looks like competition.
Meanwhile, "shall no dairy farmer should ever live in poverty".